Equipment is the lifeblood of any farming operation. Luckily, there are many different ways for farmers to obtain the machinery they need, with an operating lease and purchasing being two of the most popular options. But which option is right for you? There are pros and cons associated with each route and here we take a look at just a few of them.
Pros for operating leases
Less cost. You can acquire the equipment you need with little to no initial investment. Once the lease begins, your payments will most likely be lower than they would be if you were purchasing the equipment. These are positive things if cash flow is a current concern.
Balance sheet bonus: an operating equipment lease does not show up on your balance sheet and consequent leases do not impact your balance sheet ratio.
Flexibility: you enter into the lease, typically for three to five years, and when it ends, you can upgrade and have access to the most current technology.… Continue readingRead More »